Gibson pharmaceuticals manufacturers an over-the-counter allergy medication. The company sells both large commercial containers of 1,000 capsules to health care facilities and travel packs of 20 capsules to shops in airports, train stations, and hotels. The following information has been developed to determine if an activity-based costing system would be beneficial:
ding 5 9.00 Package 2000 Tower armadioatian Tha camnany sale both bran commercia antenners i Data Table Estimated Indirect Costs Allocation Base Estimated Quantity of Allocation Base Activity Materials handling Packaging $ 19,000 kilos 5,000 hours 95,000 Number of kilos 200,000 Number of machine hours 112,500 Number of samples 407,500 Quality assurance 1,875 samples $ Total indirect costs Actual production information includes the following: Commercial Containers Travel Packs 50,000 packs Units produced Weight in kilos Machine hours 3,000 containers 10,500 10,000 2,250 500 Number of samples 300 750 Print Done rany number in the InDUuteras and then continue to the next question. Gibson Pharmaceuticals manufacturers an over-the-counter allergy medication. The company sells both large commercial containers of 1,000 capsules to health care facilities and travel packs of 20 capsules to shops in airports, train stations, and hotels. The following information has been developed to determine if an activity-based costing system would be beneficial: (Click the icon to view the information.) Read the requirements Requirement 1. Gibson's original single plantwide overhead allocation rate costing system allocated indirect costs to products at $81.50 per machine hour. Compute the total indirect costs allocated to the commercial containers and to the travel packs under the original system. Then compute the indirect cost per unit for each product. Round to two decimal places. Select the formula, and then enter the amounts to compute the indirect cost per unit for each product. (Abbreviation used: mfg. - manufacturing. Round dollar amounts to two decimal places.) = Indirect cost per unit Commercial containers Travel packs Requirement 2. Compute the predetermined overhead allocation rate for each activity Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity. (Abbreviation used: aty quantity. Round your answers to the nearest whole dollar.) Predetermined OH allocation rate Materials handling Choose from any list or enter any number in the input fields and then continue to the next question. 2 Gibson Pharmaceuticals manufacturers an over-the-counter allergy medication. The company sells both large commercial containers of 1,000 capsules to health care facilities and travel packs of 20 capsules to shops in airports, train stations, and hotels. The following information has been developed to determine if an activity-based costing system would be beneficial: Click the icon to view the information.) Read the requirements. Requirement 2. Compute the predetermined overhead allocation rate for each activity Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity. (Abbreviation used: aty = quantity. Round your answers to the nearest whole dollar.) Predetermined OH allocation rate Materials handling Packaging Quality assurance Requirement 3. Use the predetermined overhead allocation rates to compute the activity-based costs per unit of the commercial containers and the travel packs Round to two decimal places. (Hint: First compute the total activity-based costs allocated to each product line, and then compute the cost per unit) Begin by selecting the formula to allocate overhead (OH) costs. Allocated mig. overhead costs Compute the total activity-based costs allocated to commercial containers, and then compute the cost per unit for commercial containers. Finally, compute the total activity-based costs allocated to travel packs then compute the cost per unit for travel packs, (Round the cost per unit to two decimal places.) Choose from any list or enter any number in the input fields and then continue to the next question. Gibson Pharmaceuticals manufacturers an over-the-counter allergy medication. The company sells both large commercial containers of 1,000 capsules to health care facilities and travel packs of 20 capsules to shops in airports, train stations, and hotels. The following information has been developed to determine if an activity-based costing system would be beneficial: (Click the icon to view the information.) Read the requirements QueHuy Hisur HIGH Requirement 3. Use the predetermined overhead allocation rates to compute the activity-based costs per unit of the commercial containers and the travel packs. Round to two decimal places. (Hint: First compute the total activity-based costs allocated to each product line, and then compute the cost per unit.) Begin by selecting the formula to allocate overhead (OH) costs. = Allocated mig, overhead costs Compute the total activity based costs allocated to commercial containers, and then compute the cost per unit for commercial containers. Finally, compute the total activity-based costs allocated to travel packs then compute the cost per unit for travel packs (Round the cost per unit to two decimal places.) Commercial containers Travel packs Materials handling Packaging Quality assurance Total activity-based costs Number of units Activity-based cost per unit Choose from any list or enter any number in the input fields and then continue to the next question Gibson Pharmaceuticals manufacturers an over-the-counter allergy medication. The company sells both large commercial containers of 1,000 capsules to health care facilities and travel packs of 20 capsules to shops in airports, train stations, and hotels. The following information has been developed to determine if an activity-based costing system would be beneficial: Click the icon to view the information.) Read the requirements activity-based costs allocated to travel packs then compute the cost per unit for travel packs (Round the cost per unit to two decimal places.) Commercial containers Travel packs Materials handling Packaging Quality assurance Total activity-based costs Number of units Activity-based cost per unit Requirement 4. Compare the indirect activity-based costs per unit to the Indirect costs per unit from the traditional system. How have the unit costs changed? Explain why the costs changed Relative to activity-based costing (ABC), the traditional system the commercial containers and the travel packs The traditional system allocates overhead costs solely on Activity-based costing (ABC) recognizes that although commercial containers require machine hours per unit than travel packs, they the same proportion of material handling and quality assurance Choose from any list or enter any number in the input fields and then continue to the next
